Statutory earnings for US property/casualty (P/C) insurers materially improved in 1H21, says Fitch Ratings analysts, with better underwriting performance tied to higher commercial lines pricing and diminishing effects of pandemic-related losses, as well as outsized investment gains.
The industry is reported to be better positioned for full-year results and will exceed 2020 earnings.
However, further profit expansion will be tempered by recent natural catastrophe events, including losses related to Hurricane Ida and deterioration in personal auto results, Fitch Ratings says.
Most commercial market segments have benefited from sharp renewal rate increases over the past two years. While the pace of price changes is decelerating, near-term earned premium growth will foster further loss ratio improvement in commercial lines through 2022.
Meanwhile, reported industry direct loss ratios show strong improvement in other liability and commercial auto segments.
Personal auto results materially deteriorated as driving activity and claims frequency normalize from unusual pandemic-influenced declines in 2020, while homeowners segment weakness reflect unusually high first-quarter winter storm losses.
